Government White Paper on Incomes and Output: Motion (Resumed).

Debate resumed on the following motion:

That Dáil Éireann condemns the Government for the failure of its policies as confirmed by the terms of its own White Paper.—Deputy Dillon.

Mr. M.J. O'Higgins

I said most of what I wanted to say in regard to this White Paper yesterday evening. Apart from general criticism of the Government and their policy, of the Government's actions leading up to the issue of this White Paper, I think it is right to criticise the White Paper specifically because of the complete absence of any reference to the desirability of savings or any effort by the Government as represented in this White Paper to foster a savings campaign. The Government are open to criticism and must be criticised because as recently as two months ago, in December, 1962, the picture being painted by the Government in this House in discussing the Government's policy on the Adjournment Debate was that everything in the garden was lovely. They are open to criticism for the manner in which this White Paper has been presented and for the confusion, anxiety and upset which has been caused by their manner of presenting it and, in particular, for the confusion which has been caused by the systematic back-pedalling of the Taoiseach and his Ministers since the White Paper was issued.

I referred yesterday, as did Deputy Dillon, to the speech which the Taoiseach made in December, 1962, in reply to the Adjournment Debate before Christmas. I do not want to weary the House with repetition of the quotations I gave yesterday but it is significant that, in relation to the speech which the Taoiseach made here yesterday, what the Fianna Fáil newspaper, the Irish Press picked out to set in headlines this morning are these words of the Taoiseach:

It is the considered view of the Government that the welfare of the wage earners, their jobs, security and living standards are threatened by the gap which emerged in 1962 between incomes and output.

The Taoiseach says now that is the considered view of the Government. As recently as two months ago, he was dealing with the position of wage earners in his speech in reply on the Adjournment Debate and in column 1472, Volume 198 of the Official Report of 13th December last he had this to say:

In relation to this problem of employment and unemployment at this time, the main matters that are giving the Government concern are these two. First to meet the housing needs of those whom we want to attract back from England to employment here and to meet the housing needs arising from industrial expansion in particular towns....

The picture being painted by the Taoiseach only two months ago was that the Government's policy was of such a nature, the Government's achievements were of such dimensions, that they could talk of attracting back here workers from England. That was in 1962 and he told us yesterday that it is the considered view of the Government that the welfare of the wage earners, their jobs, security and living standards are threatened by the gap which developed in 1962. Surely the Taoiseach and his Government must have entirely misread the situation when they were talking in the last month of the year 1962 if the picture they were able to paint to the House at that time was the rosy one of everything in the garden being lovely, of the trade gap being a matter of no great concern, of workers being attracted back here from England. Just two months later, in February, 1963, they issue a White Paper and make it quite clear initially that it is intended that there shall be a wage-freeze policy. If the Minister and the Minister for Transport and Power have back-pedalled from that point of view since, it is quite clear from the terms of the White Paper that there are to be no increases in pay or salaries for State employees and that, so far as arbitration awards are concerned, they are to be put in cold storage.

The Parliamentary Secretary to the Minister for Lands intervened yesterday to point out that there was no mention of a pay pause in this White Paper. That is one of the elements of confusion being created by the Government. I asked them yesterday, and I ask them again today: do they intend this as a pay pause or not? Do they intend to freeze wages or not? We have still to get an answer to that question from the Government benches.

I want to call attention to a particular difficulty which is being created for one section of our people by Government policy in this matter. That section comprises the health inspectors of our local authorities. I want to raise this matter in the face of the very point expressed by the Parliamentary Secretary to the Minister for Lands when he said that there is no question of a pay pause involved in this White Paper. It seems to me that this is a matter of justice which should be dealt with by the Government. The most convenient way of bringing the matter to the attention of the Government and the Minister for Finance, who is present in the House, is to place on the records of this House a letter which appeared in yesterday's Evening Herald from the branch secretary of the Amalgamated Transport and General Workers' Union.

This is the letter:

This Union has just had a practical demonstration of the Government's intentions in issuing their White Paper. It is clear that it is intended to put an immediate stop on all wage and salary increases including increases already negotiated and settled under the "eighth round".

As part of the eighth round for Local Government employees, the Labour Court recommended, in August, 1962, an increase for Health Inspectors employed by the Dublin Health Authority. The recommendation was accepted by both sides but the Government have refused sanction to the Dublin Health Authority to pay the increase.

The Government took six months to "consider" the matter sufficiently long to bring it within the scope of the "Pay Pause". Then, with remarkable speed following the introduction of the wage and salary standstill, the Government have intimated that the terms of the White Paper precluded their allowing the Dublin Health Authority to pay the increase.

On a number of occasions our officers were promised by the Minister for Health that the Government decision would be conveyed to us within a week. On each occasion we were met with devious and evasive tactics.

This entire incident is not only of concern to the Trade Union Movement but to all sections of the community which have direct dealings with the Government.

The "Pay Pause" has not been introduced to prevent a ninth round of wage and salary increases but to prevent any increase to the employed section of the community for any reason whatsoever. The Government have not told the people the truth and in fact their methods in whitewashing the "Pay Pause" before the public are on a par with their tactics in meeting our representation on behalf of the Dublin Health Inspectors.

That letter is signed by James Tinker, branch secretary. I want to bring that case of the Dublin health inspectors to the attention of the Government. This is a case where pay increases were recommended by the Labour Court, accepted by both sides and should have been granted by the Government but the delay in doing that was apparently as long as six months. That was a delay on the part of the Government and now, when this White Paper is issued, they are told that they come within its terms, and accordingly the pay increases will not be allowed. I do not see how, in the face of that, Government speakers can stand over the proposition propounded by the Parliamentary Secretary to the Minister for Lands that there is no mention of a pay pause in the White Paper.

Mention was made yesterday of the situation which developed here in 1956 and the measures taken by the Government at that time. The Taoiseach yesterday had the gall to refer to irresponsibility in connection with the Fine Gael Party. I think it is fair to ask Deputies opposite what help, or assistance, or understanding they gave to the Government in 1956 when this country, through no fault of the then Government, met an economic blizzard and had to take certain actions to save our national solvency. What understanding did they get from the Fianna Fáil Party, then in Opposition? What degree of responsibility was shown by Fianna Fáil as an Opposition Party in those days?

I have here one of the propaganda sheets issued by Fianna Fáil during that time. It is entitled Gléas which, I understand, could be roughly translated as “Ammunition”. It contained the ammunition issued to the boys to be used around the country in their public speeches. This is the kind of headings it contains: “No end to high prices”, “Doing nothing every day”, “Building trade faces disaster”, “More workers lose jobs in slump”, “6,000 less at work on the roads”. This is the kind of assistance that Fianna Fáil were giving to the Government at that time. There was a crisis and this was the kind of understanding and encouragement that was given to Deputy Costello's Government which had the courage to face it.

The matter was discussed in the Dáil and on 13th March, 1956, the present Taoiseach spoke on what was the official attitude of Fianna Fáil as given in the Dáil, not in Gléas. He said with regard to this matter: “They are to be criticised because the measures they have taken are ineffective and inadequate.” In other words, the official Fianna Fáil attitude at that time was that if Fianna Fáil were there, further measures would be taken —that the measures taken by the inter-Party Government were ineffective and inadequate.

Mr. J. Brennan

The earlier measures.

Mr. Lenihan

They were too late.

Mr. T.F. O'Higgins

When that man over there came out of office, the balance of payments situation was in chaos.

Mr. M.J. O'Higgins

That was on 13th March, 1956. The Taoiseach came back with the assistance of Gléas, comfortably ensconced on the seat beside him, and on 14th May, 1957, we got the truth of the matter as proved by experience. The Taoiseach then went on record in this House, at column 1151 of the Official Report for that date with regard to the measures the inter-Party Government had taken to deal with the situation in 1956. He was able to say this then:

I did not think they were dealing with it the right way but we certainly recognised their obligation to do something about it and as a result of the measures they took that balance of payments problem was solved for the time being.

Mr. O'Sullivan

That settled that.

Mr. M.J. O'Higgins

We have it on record from the Taoiseach that despite his claim, that what the Government then did was inadequate and ineffective, the steps did settle the balance of payments problem so that his Government were able to take over with that problem settled. What has happened since to allow the present situation to develop? The Fianna Fáil Party have been in government ever since. In 1962, they were painting this rosy picture of their achievements: everything was fine, there was no great worry or concern with regard to the balance of payments, but now, two months later, we have the old wage-freeze mentality of Fianna Fáil coming out in this White Paper. Let us put niceties aside: this is a wage freeze policy, and I think everyone sitting behind the Fianna Fáil Ministers knows it.

The Fine Gael Party have tabled a motion for discussion, as have other Parties in the House. I do not want to delay the House any longer but, like the Leader of this Party, I want to make it quite clear that we regard these motions as a vote of censure on the Government. We ask the Government to do the greatest service they can to the people of the country—to get out and let the people judge on it.

Mr. Meaney

Not a hope.

Minister for Finance (Dr. Ryan)

Deputy Dillon's motion, which comes first on the Order Paper, should, I suppose, be dealt with first. It condemns the Government for the failure of their policies as confirmed by the terms of the White Paper. In a pep speech during the week at Malahide, Deputy Dillon said that an adverse trade balance which amounted to £100 million, and which was the highest in history, had resulted from the policy of this Government. He said there were 70,000 unemployed and that in six years, emigration had amounted to 300,000. In a short space of time, it would be difficult to imagine a more competent politician to misrepresent and mis-state the facts, but of course he was talking to an audience who were not interested in facts. They were interested only in what could be said to denigrate the Fianna Fáil Government.

If Deputy Dillon had thought over what this Government had done in these respects, and if he had been as fair to us as the present Taoiseach was to the last Coalition Government, as quoted by Deputy M.J. O'Higgins, he would have painted a very different picture. We, on our side, in talking of the achievements of the previous Government, were always overgenerous, unlike Deputy Dillon who issues this kind of statement at Malahide.

First of all, on the side of national production, in the six years we have been in office now, the national production has increased by 2.6 per cent. per annum and that includes the two very bad years at the beginning of our term of office, 1957 and 1958, when we had to try to reverse the downward trend created by the Coalition Government. In the three years 1954 to 1956, the increase in national production averaged 0.6 per cent., a very big difference from 2.6 per cent. If we leave out 1957 and 1958, and take the period from the issuing of the Programme for Economic Expansion, we could show an average increase over the past four years of about 5 per cent. which in fact is eight times better than the Coalition Government were able to do.

On the export side, a very important item in the economic programme of any Irish Government, we find that, in 1953, the year before the Coalition Government, exports stood at £114.1 million. I think any neutral person here will admit that during those years —back in 1952 and 1953—the main part of the policy of the Fine Gael Party was that we should export more, particularly agricultural produce, to the British market. However, just to give a start to this question of exports to the British market, the figure for 1953 was £114.1 million. In 1956, it was £108.1 million. That gives the record of that Government, of a Government in which Deputy Dillon played a very big part—Deputy Dillon who criticised this Government for the failure of their economic policy. The average figure for exports during these three years, 1954 to 1956, was £111.4 million. During the past four years, the figure has been £159 million and last year—perhaps some Deputy may draw attention to it—it was lower than in 1961, but the three years 1960, 1961 and 1962 should be taken together because there was a remarkable holdup of cattle exports in 1960 which went out in 1961 and as a result the exports in 1962 were a bit lower than 1961.

Deputy Dillon also spoke of the employment side and I should like to point out that in the second last quarter of 1962, we have had the highest ever employment level in industry. The employment in transportable goods industries amounted to over 171,000, which was 25,000 more than in the last quarter of the Coalition Government. There has been, as every Deputy will be aware, a decrease in agricultural employment in this country for many years. In fact it goes back for a century if we want to go back that far. That, in recent years, has been due principally to consolidation. People cannot live nowadays unless they have a wage or a salary and it is no longer possible for people to live in the country without work. The result is that they have cleared off the land unless fully employed.

Taking that for granted, it would be no harm to give the total employment on the land, in industry and so on, and in all other forms of employment. In early 1954, it was 1,185,000 and in early 1957, it was 1,136,000. During the three years the country was under the Coalition Government, our employment went down by 49,000, a very big decrease over three years. From 1958 to 1961—we will have no later figures until the Budget—it went down by 3,000. It went down by 49,000 during their three years and went down by 3,000 for the first four years we were in office, but I am quite certain that figure has been reversed.

We hear a good lot of talk about agriculture. I have often thought if we could get the opinions of other people about agriculture, it would be very useful in deciding what the various Governments have done so far as agriculture is concerned. One very good guiding principle, however, is bank credit, because everybody will admit the banks do not give out money unless they have confidence in the people to whom they are giving it and confidence in the use to which the money is being put. If you take it on that basis, bank credit to agriculture stood at £17.2 million in April, 1957, when the change of Government took place. In April, 1962, five years later, it stood at £34.7 million—twice as much. The banks, at any rate, have twice as much confidence in agriculture now as they had when the Coalition Government were leaving office. As far as the Agricultural Credit Corporation are concerned, their credit has increased from £2½ million to £4 million.

The balance of payments was a principal point made by Deputy Dillon when speaking over the weekend. A more sensitive politician than Deputy Dillon would remain silent on the balance of payments, but sensitivity is not one of his outstanding virtues. If you take the invisible items which must be taken into account, as well as trade returns, you get the figures published each year by the Statistics Office—the balance of international payments. For the three years the Coalition Government were in office, there was an accumulated loss of £55.4 million on the international balance of payments. For the first five years Fianna Fáil were there, we just broke even. There was no loss at all. The estimate for 1962, which has not yet been officially calculated, looks to be about £15,000,000. Therefore, taking our six years, we have gone down £15,000,000 compared with the £55,000,000 for the three years of the Coalition Government. Our external bank balances are increasing at the same time. So long as they go on increasing, even though the international trade balance goes down, there is no immediate cause for worry, provided, of course, we take timely precautions as set out in the White Paper. I should like to emphasise that a Government should take timely precautions. Our efforts in that respect by the issue of the White Paper and what the results are will prove whether we are right as compared with the action taken by the Coalition in 1956, action which was taken far too late and which brought very great suffering to our people.

Deputy Dillon says that our external credits are due to our selling land to foreigners. He appeared to argue that the greater part of the £100 million he talked about was due to this immigration of people here to buy land. As far as Departments can assess this figure, it is something under £1 million, not £100 million. Of course, that is in line with Deputy Dillon's exaggeration in most things. He goes on to refer to current unemployment at 70,000. That, of course, has been inflated by the very bad weather conditions. As we all know, most of those engaged in building and construction work have been laid off for the past four or five weeks and the number of unemployed has been inflated as a result of their being laid off.

In mid-December, 1956, under the Coalition Government, unemployment totalled 73,000. In mid-December, 1962, before the bad spell, the figure totalled 49,000—a very big improvement indeed. When we took office in March, 1957, unemployment was 85,800. It has never reached that figure since in our six years of office, and probably never will unless a Government of the type installed here in 1954 should come back. At that time, in March, 1957, it was 10.8 per cent of the insured population—also a record figure which has never been reached since.

Deputy Dillon said that emigration for the past five or six years was 300,000. When a question is asked here about emigration figures, the answer officially always is that emigration figures cannot be given except after a census has been taken. But the figures that are given—and the figures Deputy Dillon is relying on—are the figures of the net movement of passengers, both by sea and air, outwards and inwards. If the number going out in a year is higher than those coming in, the excess out is taken as the figure for emigration. Whether it is absolutely correct or not, we take it as being at least fair enough to compare one period with another.

The figure mentioned by Deputy Dillon, 300,000, would mean that emigration in the past six years was 50,000 per annum. During the three years the Coalition were in office, the figure was 130,000, which is 43,000 per annum. That is a bit better than the 50,000 during our six years. Here the figure is 230,000, not 300,000. Deputy Dillon is a little bit nearer than usual in this case, but nevertheless there is an error of 70,000 in his figures. In all fairness, however, I think we should not be saddled with the year 1957. During the first three months of that year, there was abnormal emigration, and we could not be expected to stop emigration during our first few years of office. If 1957 is left out, it gives a better picture from our point of view than what I have given.

In last year, 1962, emigration was down to 20,800. The natural increase in the population is estimated at 26,000. Therefore, we have actually reached the point where our population is beginning to increase. That is a very satisfactory position to have reached after so many years of adverse emigration figures.

That performance of Fine Gael between 1954 and 1956 in reaching records in emigration, unemployment and adverse trade balance and reaching the lower limits in exports and national production was referred to during the week by Deputy MacEoin as "the wise economic policy of Fine Gael". It was the accumulation of all these adverse economic factors which compelled the Coalition Government to introduce measures to save the economy in 1956. Principally, of course, these consisted of putting on very severe tariffs which created great hardship for many people, not only consumers but also manufacturers and others. In 1956, the Fine Gael members of the Government had realised for the first time, as far as I can see, that production must keep up with earnings or there would be trouble. Fine Gael and Labour up to 1956 believed that it was money that mattered and not production. So long as they could have money to throw around, everything was fine and they went on merrily while the loose money lasted. Then disaster came to them.

Having realised that very important fact in the economic situation, and realised it at such expense to the country, in suffering and otherwise, they ought to be able to see that the same principle holds now as held then. In fact, judging from the speeches of the Labour Party, they do not seem to have realised that fact even yet because they go on talking about the measures taken by the Government as being unnecessary and saying that the free policy of increased earnings and so on should be allowed to continue. I think we must accept the fact that if incomes increase, there is more spending power and if the output of goods and services has not increased, then one or two things must happen. Either prices go up or imports go up, or perhaps both happen and very often, it is both. In this last year or two that we are dealing with now, both imports and prices have gone up and it is because of these indices, among others, that the Government issued the White Paper.

If prices go up, first of all, the increased income to the people who got it is not a real increase. They have more money but it takes more money to buy the goods they were buying before. There may be a slight margin of benefit but it is only slight and if wages or salaries or dividends, all these ways in which money can be given out, keep pace with production, there is no increase in prices and the increases people get are real increases. On the other hand, if imports go up, there is the danger of an increase in our adverse trade balance and that also leads to trouble.

If prices go up, those on fixed incomes suffer and those on low incomes, whether employed or not, are also bound to suffer more severely than those who are better off. Higher prices and higher earnings will make competition for our producers more difficult and especially so for those who are in the export business and, as we all realise, we are coming up against most intense competition in the export market. We want to build up our exports but we must be in a position to compete in order to build these markets. If export becomes impossible, trouble commences. It was one of the big troubles in 1956. If the balance of payments goes wrong, unemployment is on the increase and there is restriction of credit and general economic depression as we had in 1956. It is to avoid all these things that the White Paper was issued.

We issued the White Paper as a warning to the country that we should watch our step. It sought to impress on the people the incontrovertible fact that earnings can only move with increased production if we are to maintain a sound economy and if we are to create conditions necessary for an increase in real earnings. Anybody reading the White Paper must see that that is the whole object of it. How Deputy O'Higgins can talk about back-pedalling is beyond me——

Mr. T.F. O'Higgins

Read the Taoiseach's statement of the following morning.

Dr. Ryan

We are dealing with the White Paper. Since Fine Gael came into this House, they have always tried to succeed by misrepresentation. They will never face the truth. Why do they try to misrepresent the facts?

Mr. T.F. O'Higgins

Read the Taoiseach's statement.

Dr. Ryan

Let us deal with the White Paper.

Mr. A. Barry

Do not mind the Taoiseach's statement.

Mr. O'Sullivan

Do not mind the head of the Government.

Dr. Ryan

The White Paper is there to point out the one incontrovertible fact that unless output keeps pace with earnings, there will be trouble. That is the whole gist of it and nobody can either back-pedal or fore-pedal on it. Why not deal with facts? Would Fine Gael not face the truth and drop the misrepresentation on which they have lived for the past 20 or 30 years?

We had these desirable conditions here at the end of 1960. We had the biggest increase in earnings during the four years prior to that even known in this country and it was a real increase because the cost of living had not gone up. It remained stable and when a man got a 10/- increase, it was a real one and he had money to spend over and above what he had before. But when increases in earnings go above output, prices go up and the 10/- a man gets as an increase is perhaps worth about 5/- and he is not much better off as a result.

For the last two of those four years, national production had been increasing at a very satisfactory rate. Some Deputies talk about taking away something from the workers. We are not taking anything away. We are giving a warning of the position: Try to increase production until we reach the level of earnings and then we are in a position to say: "Now, go ahead. An increase can then be given which will be a real increase and of which every halfpenny will be available to buy extra goods, extra services or whatever the person concerned may desire."

The only restrictive measure in the White Paper is that in regard to those employed by Government Departments or by State companies. We have said that we are directing the people in charge there not to give increases where they might have the effect of sparking off another round of wage increases or where it might be against the national interest. It has always been the practice for the Government not to be the first to give an increase in wages. Take a place like the Board of Works, for instance. When carpenters in the building trade get an increase, carpenters working in the Board of Works get the same increase. That is the principle as applied in all Government Departments, that they follow whatever increases may be given, but they do not start the increases in such cases. We are only following what has been the practice for many years—for all time perhaps— in this country.

I should mention another point raised by Deputy M.J. O'Higgins, that is, that there are certain increases being considered for many months back, some by arbitration and some by the Labour Court. These will have to be considered as a separate category because it would be unfair if the charge could be made against a Government Department that they were so slow in considering these particular increases that they now fall into what they refer to as the wage pause category. That would be unfair. These have to be considered on their merits and should not be included with those seeking an increase at the present time.

Deputy T.F. O'Higgins also referred to health inspectors. That is a different case. It will be decided on its merits.

Mr. T.F. O'Higgins

The decision not to start the pay pause will be reversed?

Dr. Ryan

The decision was never conveyed.

Mr. T.F. O'Higgins

It was conveyed to the Dublin Health Authority. They were told that it came within the terms of the White Paper.

Mr. Kyne

We shall deal with it later.

Mr. O'Sullivan

The Minister for Health did not implement the award.

Dr. Ryan

He did not implement the award so far. I know that. I say that that does not come into this White Paper. It is a matter which occurred before.

Mr. T.F. O'Higgins

Would it not be possible to speak with one voice?

Dr. Ryan

We do speak with one voice. The Minister and his experts speak with one voice. I should say also that a number of groups in the Civil Service are still awaiting their eighth round wage increase. Due to various causes, not my fault, not anybody's fault——

Mr. O'Sullivan

They will get it?

Dr. Ryan

Wherever the arbitration has been given, we immediately sanction it. This eighth round wage increase is a thing apart from this altogether. These cases will be decided on their merits.

We pointed out the ill effects; we cannot give an order; it is not within our power to do so. We pointed out the ill effects of increasing earnings before output is increased also. We expect that the employers and employees, too, will take note of that fact and that neither the employee will press nor the employer agree to give increases until our economy has increased to the level where real increases can be given.

It is no sacrifice to ask people to remain as they are until an increase can be afforded. We can talk of this matter with assurance, if you like. No Government has ever made such conditions possible, as we did, to give as big a real increase in earnings as has been given over the past few years. No Party can criticise this Government as being against increased wages. What we are against is any action that may interfere with the economy of this country. What we are in favour of is the building up of that economy properly by increased output, so that real increases can be given in earnings. After all, every Government, I am sure, has the same policy, that is, to increase the standard of living of the people. The aim of any Government is to improve the conditions of the people.

To go back to the White Paper—it points out very forcibly the relationship that should be maintained between wages and output. It winds up by asking State companies not to grant any increases in wages or salaries (1) if such action might start a general demand for increases all round, or (2) if it should be against the national interest. The principal attack on this White Paper by the Labour Party is that we have informed the public what we believe to be the position. That is all we have done. The Labour Party do not tell us what we should have done. We can infer from their speeches that they would prefer we had buried our heads in the sand and waited for the 1956 catastrophe to come on top of us. We are convinced that if the warning is heeded, we can bring production up to earnings and this would pave the way for another increase in earnings. If we ignore the signs of danger, we are convinced that we should be running into disaster, and we know what disaster means. I have outlined it before. It takes two or three years to reach the bottom of the pit and come up again to the level we find ourselves at present. We would lose two or three years in our national programme. At the end of that time, when we would have learned our lesson, we would begin to advance again. It is better that we should not run the risk of that type of economic disaster.

The point is that the Labour Party have made no suggestion. The only thing we can infer is that they have ignored this matter. They have contented themselves with attacking the Government on what they referred to in some speeches as the pay-pause and in other speeches as a wage-freeze. I suppose that if an economic crisis did come, as there is a danger, and we had done nothing about it, they would be content to blame the Government. That does not save the country. That sort of political manoeuvring may seem good tactics to the Labour Party, but it is the people with low incomes and those whose employment is not too secure who are sure to suffer. The well-off people will be all right. They will not go hungry. In giving this warning to the country, we cannot be accused of having the well-off people in mind. They will not suffer. Whatever depths to which the economy may descend, the well-off people will have enough to live on.

Whether we should have consulted the Trade Union Congress is a matter of opinion. Some people may hold that opinion and some people may hold the opinion that it was unnecessary. There is no reason why we should. People do not consult us on pronouncements on the national policy, although we are very much concerned with national policy in this country. I do not expect them to consult us. It is a matter of opinion whom we should consult or whom we should not. We certainly have no wish to ignore the Trade Union Congress. We did state in our White Paper that the Government would be anxious to consult them and also the employers with regard to the future as soon as the White Paper had been studied.

Fine Gael, of course, have very adroitly avoided giving a considered opinion on the White Paper. This White Paper was awkward for Fine Gael at the time. Of course, Fine Gael always make up their mind after finding out how many votes will be on this side and that, but they could not make up their minds this time on which side the most votes were and they got round it by saying: "We condemn the Government because this is necessary and we will not be asked to make up our minds on whether we agree with the White Paper or not". They will make up their minds eventually, and if they do, it will be on an opportunist judgment of the situation, as they have always done. Whether they will adopt the practice they sometimes do of abstaining from voting on the White Paper, I do not know, or whether some of them will go for it and some against it according to the complexion of their constituencies, I do not know. We are not going to get an honest opinion from the Fine Gael Party. It does not concern them and never did concern them; what they are concerned with is votes, and then they will cast their votes accordingly.

The only sensible opinion is from Deputy McQuillan. He wants the Government to resign. Let us hear what the others think. As far as I am concerned—I have not discussed this with the Government—we are quite prepared to go to the country on the issues that have been raised here. First of all, if the country is sensible and mindful of 1956, we will not be in any doubt about the result. But if the country is not sensible then we are prepared to take the consequences.

Mr. Cosgrave

There is no doubt that by the time this debate is finished, the White Paper will have disappeared because the most obvious conclusion from the various speeches that have been made is that there is a tactical withdrawal from the terms of the White Paper.

It is not sufficient to leave the matter at that stage because this White Paper was issued for a specific purpose. The message conveyed in the last paragraph of the White Paper is clearly stated. It says that conciliation and arbitration procedures should be not applied, if necessary until it can be done without damage to the national economic interest. A day or two after the White Paper was published—indeed almost immediately because of the reaction—the Taoiseach published a statement saying it was not proposed to impose a wage restraint or a wage-freeze. The only test of any policy is to judge on the results.

The trade unions and State servants and others affected by this White Paper will be pardoned if they express grave concern at its publication when they look at what occurred on previous occasions. I need not refer to the fact that in 1952 the then Minister for Finance postponed the Civil Service arbitration and conciliation award for months and did not allow that award to take effect until the following year. There are at the present time at least three categories of State or semi-State servants who have not been granted the eighth round. One of these categories has already been referred to here this morning, and they have not merely not been granted the eighth round but they were jumped in the seventh round and did not get it. The seventh round was avoided and subsequently last year when they negotiated with the various health authorities, the Labour Court made an award and that award was to grant certain salary scales to health inspectors of the Dublin Health Authority.

That award has not, so far, been implemented by the Minister for Health. I gather from what the Minister for Finance has said here today that it is proposed to pay it. In the case of health inspecors, most of them have received no increase since 1958. A few got the 1958 increase in 1959, but there has been nothing since then for any of them. There was a direct refusal by the present Minister for Health to sanction a Labour Court award to grant an increase applicable to some people who have received no increase since 1958 and all of whom did not get the seventh round award at all.

There is the case of the other weakest section in the Civil Service— the clerk-typists—who have not got the increase.

Dr. Ryan

It is not fair to mention that now. It is before the courts.

Mr. Cosgrave

I just mention it. There is the case of Radio Éireann and TV journalists who have an application before the Authority. If the White Paper means anything, the clear directive in the last sentence— or couple of sentences—is that these awards are not to be paid. Undoubtedly the Taoiseach's statement and the statement made here by the Minister for Finance this morning appear to modify the impression created by the last sentences of paragraph 21, but it brings me to the point: why was the White Paper issued without consultation with the parties directly concerned? I do not say, and I do not think that anyone could insist, that a Government are obliged to accede to any side in industrial matters or to accept the views expressed by them. I believe that the developments that occurred here last year were of the most significant kind, developments which offered prospects of economic stability and of improved industrial relations, but that whole atmosphere has been jeopardised and upset by the fact that the Government proceeded to issue this White Paper without consultation.

A report was given in the newspapers on 12th July last about a meeting which was held on the 11th between representatives of the employers and representatives of the trade unions. As a result of that joint employer-labour conference an agreed statement was published and a special committee was established. It was agreed by that special committee that it was desirable that efforts should be made to establish a more rational and better informed basis for wage discussions and negotiations at whatever level they normally took place. The special committee believed that a rational approach to problems and industrial relations necessitated consideration of all matters related to the national economy, the competitive position of industry generally and the impact of external development. It was suggested that provision be made for a national employer-labour conference each year for the purpose of considering the national economic situation, and those factors in the situation which were of importance to employers and trade unions.

Now, this decision to publish the White Paper is impractical for a variety of reasons. We have seen that a similar scheme or system was impractical in Britain. It is not for me to express views on either politics or economics in another country. It is sometimes difficult enough to understand politics in our own. But the position is that this attempted wage pause or wage freeze cannot be operated in a democracy and the objection to the publication of the White Paper is that it seeks to dictate to and dominate only those categories who are employed either directly or indirectly by the State. It cannot be made effective on private employers or those employed in private industry or ordinary occupations where the State is not concerned.

There is no doubt that we accept the view that wholesale wage and salary increases unrelated to the rise in the cost of living would jeopardise the economy but the remedy is not available, for instance, in a standstill or so-called wage pause. In the White Paper, all the accent is on wages and salaries and none on profits or other factors which affect the economy. One of the advantages the Government had since 1957 is the fact that import prices were falling and fell for a considerable period. There has been a slight rise in recent times.

In 1956, the then Government had to deal with the problem caused by external economic factors, by the rise in prices due to the Suez aftermath and the increase in the cost of petroleum and other commodities directly concerned with the Suez situation. The import price for February, 1957 was 111; it dropped to 104 and subsequently rose to 106 in 1960. During that period, while the import price level dropped, there was a substantial rise in the cost of living and wage and salary adjustments, for which the Minister took credit here this morning, were made. The import price figure in 1957 was 111.9 and it dropped in 1959 to 104.7 while during that period the cost of living increased. Today the cost of living is 22 points higher than it was in 1957. It increased each year, with the possible exception of a temporary easement in 1960, and if the various categories of workers and wage earners sought increases, it was to compensate for the rise in the price of essential commodities. There was a rise in the price of food, a rise in the price of everything people had to buy, increased bus and train fares, increased health charges. But what about those categories in the community—and those are the categories I believe who are worst affected and most seriously jeopardised by the rise in the cost of living—the fixed income categories, the pensioners, particularly those living on fixed pensions either from accumulated past savings or those living on incomes from accumulated savings on investments? Some of those categories received a small increase, those pensioners directly paid by the State, but many of them received on increase and had to bear the increase in the cost of living without any compensatory advantage.

Now, one of the advantages of the joint Employer-Labour Conference was the fact that it discussed not merely wages and salaries but, in addition, the big economic questions confronting the country. One of the matters that was the subject of consultation at these discussions was not merely, as I say, wages and salaries but the problem of redundancy, the problem of retraining workers, the problem of re-adaptation which would occur in the event of this country becoming a member of EEC. I want to express the view that because of the great deal of talk and discussion that went on about the possibility of membership of the EEC, a great number of people may have been misled into the belief that we would have an easy passage, once we got into that organisation. That prospect no longer exists but whether we get into the organisation or not, the prospect before this country is one of keen competition as time goes on. Whether the trade talks conducted under EFTA involve a rapid lowering of tariffs or whether ultimately there are joint negotiations between EFTA and the EEC, no matter what the consequences, the competition facing this country will be keen, and will test our economic resources and our industrial and agricultural resources to the utmost.

Because of the fact that these negotiations were being conducted, we refrained—I believe, rightly—from any unnecessary criticism of the Government in the conduct of these negotiations, in fact to such an extent that some people expressed the view that we were not discharging our functions or our responsibilities as an Opposition. I think we were right in the national interest to do that. I believe there is great interest in our attitude in that matter and in the attitude of Fianna Fáil when we were facing problems in 1956, created by external factors. So far as this White Paper is concerned, this is an internal matter.

The Government cannot be blamed, and it is not right to blame them, for the breakdown of the Brussels negotiations. Undoubtedly, the breakdown of the Brussels negotiations has caused effects that nobody knows here. That applies not merely to this country but to other countries. In the White Paper, the situation is entirely different. It is a domestic matter and one over which we have control. Some people say the White Paper is biased. Why is the impression being created that the White Paper is biased? One of the dramatic facts that is available from examination of the published statistics is the growth in purchasing. There is no analysis of the growth in hire-purchase, which has been quite dramatic.

If we look at Table IX of the January Quarterly Bulletin of the Central Bank of Ireland, we see that for hire-purchase in December, 1956, the figure was £9.9 million. It had grown in September, 1962, to £31.8 million. A very substantial amount was financed by external capital. In 1956, the external capital figure was £4 million and it had grown in September, 1962, to £11.9 million. One of the factors that affect our economy is the growth of hire-purchase. Some of it may be for capital goods; some of it undoubtedly is for machinery and equipment, but a great deal of it is for knick-knacks. A great deal of it is unnecessary but it is easy to obtain these goods because facilities are made available to a considerable extent by external finance companies. There is not a single word in the White Paper analysing the causes of that or interpreting the factor involved in it, the extent to which, on the one hand, it may represent capital goods, and, on the other, unnecessary purchases and the creation of unnecessary debt, imposing a burden not merely on a great number of families but on the State as a whole.

In addition to that, there is no reference, or only scant reference, in the White Paper to the substantial increase in industrial profits. I do not claim that industrial profits or company profits are as big a factor as, say, the total effect of wages and salaries but they are a very significant factor. The important fact is that between 1958 and 1961, industrial profits increased very substantially. If you look at Table A.1 on National Income and Expenditure, you will see there is an increase from 1958 of £39.1 million to £61 million, that is, including the corporate profits before tax. If, on the other hand, the figures for total profits of industrial undertakings are examined, it will be seen that there was an even more dramatic growth in the amounts paid. What is more remarkable still is that, between 1953 and 1960, the total profits were distributed so that there was no ploughing back, or the amount ploughed back was negligible, in order to re-equip and re-vitalise industry for the tasks ahead.

This morning, the Minister for Finance expressed satisfaction, as we all can, with the growth in industrial exports and the increase in industrial production, and he naturally claimed credit for Fianna Fáil. I want to quote an impartial observer, an outsider who is not concerned with internal politics here, Professor Carter, the Jevons Professor of Political Economy in Belfast who said in regard to industrial exports that the biggest single factor in the growth of our industrial exports was the tax relief introduced in 1956, the tax remission on exports. The fact is that the Government, realising the advantages of that, extended it still further, and Professor Carter described it as the biggest single factor in the growth of industrial exports.

That poses a question whether what has been done up to the present is adequate to meet the needs of the future. Are the tax concessions adequate? The problems to be faced are urgent and need attention. If we are to surmount these difficulties, it will require a crash programme. That programme can only be implemented in a modern democracy with not merely the agreement of all sections in industry, employers and labour but the full co-operation of all sections. The defect of this White Paper is that it has jeopardised and interfered with the co-operative spirit that was evident when the joint conference was held last July.

This challenge must be met on a national basis in which all sections play a part and where one section will complement the action of another. The united effort will require not merely the co-operation of all sections of the people but the inspiration of better leadership and direction. I suppose this is one of the duties which Ministers cannot escape, although reading the newspapers recently, one gets the impression that this Government go to a great many functions and dinners to make speeches. One of the things that irritate people concerned in industry are pompous platitudes. The amount of pompous talk from Ministers lecturing people on what should be done has an irritating effect on people who are engaged directly in consultation and directly in industrial expansion.

I remember many years ago when problems arose between the trade unions and employers, the Taoiseach, the Minister for Finance and I as Minister for Industry and Commerce sat around a table in Government Buildings with, on one day or a series of days, the representatives of the employers and, on other days, with representatives of the trade unions. During those discussions, the problems and difficulties and the aims of Government policy were explained to both parties in industry. Co-operation was sought on the basis of free consultation and discussion openly entered into between all sections, on the understanding that these discussions in no way limited the right of action or the right of decision which was available to either side if they failed to reach agreement between themselves.

This White Paper was published without consultation. Nobody suggests that the Government should not decide, as they have the absolute prerogative as a Government to decide, public and national policy, but at least the parties directly concerned should have been consulted in advance and an indication given to them that it was proposed to publish this White Paper. The reaction to this White Paper is an indication of very bad public relations. Indeed except on a very few occasions Government statements have not been issued on a Sunday. On this occasion the Taoiseach had to issue an explanation or a modification, whatever description is appropriate, of the White Paper on Sunday because of the reaction of the Trade Union Congress.

I do not believe that anyone who has had experience of trade unions or the employers would suggest that they are anything but reasonable. Undoubtedly at times and in particular industries, certain individual unions or individual members or employers, or maybe a specific body, may appear unreasonable or intransigent but by and large the vast bulk of trade unions and the vast bulk of employers are reasonable and responsible and have shown their capacity to face in a reasonable and responsible manner the problems which concern the country. In 1957, when the difficulties which had flowed from the aftermath of the crisis were explained to the trade unions they voluntarily negotiated with the representatives of the employers a 10/- ceiling and that was agreed as the operative wage round at that time. If reasonable people are approached in a reasonable fashion, they will respond.

No matter what developments emerge finally from the trade discussions, we will, as I have said, be faced with keen and effective competition. Is it not obvious then that it is in the national interest that the co-operation and combination of employers, workers and all sections of industry should be secured in a great partnership embracing not merely Government but all sections of the community and people in an effort to make industry effective, competitive and to bring it to the highest pitch of efficiency? Such co-operation is essential, particularly with the proposed rhythm of tariff reduction in the EEC or EFTA facing this country. What I cannot understand is why the parties affected by the White Paper were not consulted prior to its being published. The fact that they were not consulted has caused the publication of two statements by the Taoiseach, this debate and a statement by the Minister for Finance that some categories of public servants will have a rate paid to them which was denied to them up to the present.

It has been the experience of anyone who has been in Government that the Department of Finance has certain well-defined responsibilities. I do not want to criticise the Department in the exercise of its functions and responsibilities. It would be correct to say that many of the higher officials, both past and present, are dedicated officials and public servants. One of the duties of the Department of Finance is to bring before the Minister for Finance the possible consequences and trends of economic policy. That is done in a regular weekly report to the Minister and he, in turn, brings these facts before the Government, particularly if the situation becomes sufficiently serious to warrant Government attention.

I believe that on certain occasions since the war, and I can point to three specific occasions, the Department have misinterpreted the indices and suggested actions and succeeded in securing Government approval for actions, the consequences of which were worse than the problems which it was sought to solve. In 1947, the Fianna Fáil Government brought in a supplementary Budget. That caused a general election, and the defeat of the Government. Subsequent to that general election, there was a change of Government and a period of sustained economic growth. In 1952, the Fianna Fáil Government introduced a Budget making a drastic reduction in food subsidies and within two years, there was again a change of Government. I want to say that on both these occasions it was a Fianna Fáil Government that was concerned.

In 1956, we introduced remedial measures to meet the problems arising from the Suez crisis. I want to say, in retrospect, I believe that on that occasion we went too far and too fast. For those reasons, I believe that we should proceed with the greatest possible caution and examine with the greatest care the full circumstances and implications of this White Paper. A wage-freeze is no remedy for the problems which affect this country. It may be said that in a certain position unnecessary increases in wages or salaries would jeopardise the economy of the country, but if we are to get sustained economic growth and expansion, we have not merely to expand the trading agreements which we have and to secure new trade agreements with Britain and the other continental countries with which we have such agreements on a bilateral basis or a multilateral basis but, in addition, we have to secure the willing co-operation and assistance of all sections of the community, on the understanding that all will be asked to make the same sacrifices in order to achieve expanded earnings in which all will share equally.

There has been unnecessary delay in implementing awards to the weaker sections of the public service, a delay which is tantamount to a refusal. A delay of two or three years in implementing an award is tantamount to a refusal and that delay has been applied to some sections. If an award is postponed unnecessarily, or the negotiations are unduly protracted or if, during negotiations the threat is held out that a wage-freeze is imminent or that one rule will be applied to State employees and another to private employers, then it is obvious that we cannot get the co-operation, or initiative, or drive or the combined enthusiasm which is essential for economic progress, expanded exports and a general improvement in living standards.

One of the significant facts of the present time, despite the claims of the Government, is that there has been a substantial and sustained increase in the cost of living since 1957. Despite the advantages of lower import prices and stable economic conditions in Britain and Europe generally, there are fewer people in employment and, up to the present time, 300,000 people have emigrated. Surely there is something wrong with an economic policy that promises 100,000 new jobs and that results in less employment at the present time than there was in 1956?

I believe that the atmosphere of the Employer-Labour Conference was most promising, as far as the national economy was concerned. It offered a prospect of sustained economic growth, a co-operation in regard to wages and salaries which is of vital concern and a hope of creating in a specific way a partnership of all concerned. It offered to the country the benefits of the experience of those engaged in industry and those in the trade union movement who have experience in these matters, with the object, not merely of promoting the benefit of their own members, but also of promoting and expanding the economy of the country in order to provide better living standards for everybody.

This White Paper has been greatly modified because of the reaction of the Irish Congress of Trade Unions and the debate here. It was published without adequate consideration of the consequences. That is now obvious from the statements made by the Taoiseach and from his intervention in the debate. The speeches made yesterday by the Taoiseach and today by the Minister for Finance indicate that the Government have now withdrawn considerably from the line taken in it. Remember people can only judge on results, and experience indicates that if this Government could do it, they would prevent or interfere with the conciliation and arbitration machinery which, I am glad to say, the inter-Party Government introduced and made effective.

It is because of previous experience that many sections in the Civil Service, the Garda, the teachers and very many in semi-State organisations, are worried because they feel that any reversion to that old mentality, that old policy, would not merely be detrimental to their interests but to the economy as a whole. It is for that reason we oppose this White Paper. We believe it will be ineffective because it does not take into consideration a variety of factors, not least the very substantial increase in the cost of living in the past five or six years. We oppose the White Paper because it makes no effective analysis of company profits and the extent to which company profits have or have not been ploughed back for re-equipment and for the revitalising of industry to meet the challenge of competition in the future. The fact that we need to modernise, to become more efficient, has been adverted to only in a very passing way in the White Paper and this creates the impression that it has not given full consideration to the consequences involved for certain aspects of the economy. It is for that reason that we oppose it. We believe that if it is implemented, the people will react in the only way they can react, the only way in which on three previous occasions they did react—by making their feelings known through the ballot boxes.

Parliamentary Secretary to the Minister for Lands (Mr. Lenihan)

The White Paper is a very clear analysis of today's realities in regard to incomes and output. It does not pretend to do anything more or less than that, but I feel that most of the misconceptions and misinterpretations that have arisen since its publication arose initially when what could have been a fruitful discussion went completely off the rails through a misinterpretation of the White Paper, a completely twisted interpretation of what was in fact a very realistic analysis, in the form of the statement from the Irish Congress of Trade Unions published in the newspapers on the day following the issue of the White Paper. I feel it was published with some haste and without proper consideration and indeed the, in many ways, constructive statement issued by the Congress yesterday will bear out the truth of what I have said. I quote some excerpts from the joint statement of the Irish Congress of Trade Unions:

Congress is opposed to compulsory wage restraint or interference in free negotiations between trade unions and employers. In particular, it opposes any attempt to use the power of the State to restrict.

I agree with that. That is a statement of principle with which anyone on this side of the House would be in complete accord. There is no question of restriction of wages, no question of a standstill wages order, of interference in wage negotiations, in this document, Closing the Gap. The Irish Congress of Trade Unions in that statement rushed in without any consideration whatever of the very realistic analysis contained in the document. They presumed in their statement that the intention of the White Paper was to restrict wages in a compulsory fashion.

Mr. Kyne

What about the Taoiseach's letter to the Congress last Monday?

Mr. Lenihan

It is an attempt to resurrect the famous bogey of a wages standstill order? I challenge any member of the House to point out any suggestion in this White Paper of a wages standstill.

Mr. T.F. O'Higgins

Read the last page.

Mr. Carroll

The last sentence.

Mr. Lenihan

For this very reason, arising out of this misinterpretation of the White Paper, I feel that what might have been a very fruitful discussion based on this analysis of the position here in regard to incomes and output has gone completely off the line and what we are discussing now in vacuo is a series of misconceptions that have no relation to the analysis contained in the White Paper.

Dr. Browne

Did the Parliamentary Secretary not hear the Taoiseach say that he would not permit statutory bodies to give increased wages?

Mr. Lenihan

The Taoiseach had to make a Government statement the following day to correct a fantastic misinterpretation of a very sober and sensible document. He emphasised the fact that there was no standstill on wages. That was very necessary in view of the fantastic misinterpretation of the facts, a hasty misinterpretation, a rushing-in without due consideration, by the Irish Congress of Trade Unions, and by reason of that misinterpretation, the Taoiseach had to come out specifically and immediately and place emphasis on the fact that no standstill on wages was envisaged. That still remains the position. There is no attempt in this document and no proposed attempt by the Government in any way whatever to impose any wage standstill or freeze. I hope that misconception has been eradicated from this debate.

Mr. Treacy

Will the Parliamentary Secretary explain the last paragraph?

Mr. T.F. O'Higgins

A Daniel come to judgment.

Mr. Lenihan

It seems it will not be eradicated. However, a number of other misconceptions have come to light in the course of this debate and in the course of public discussion during the past week or so. This idea that a particular section of the community is being victimised by this White Paper is completely outrageous.

The full title of this White Paper is Closing the Gap—Incomes and Output. Incomes include wages, salaries, distributed profits, dividends — in fact, everything that comes in to a person in the way of personal earnings. This document deals with incomes. The word “profits” is referred to at various stages of the document. The whole purpose of the White Paper is to present a realistic analysis of incomes, including profits, and to ask people to restrain income demands. This restraint applies to wages, salaries, profits, dividends—everything that can be categorised as income. That, again, I hope, removes another misconception. I do not want to bore the House by going into the various portions of the White Paper where profits are specifically referred to as a factor that must be taken into consideration in any restraint the community must voluntarily enter into.

Mr. Kyne

What proposals are there for restraint on profits?

Mr. Colley

Furthermore, the eighth round was only finishing up.

Mr. Kyne

It is not finished yet in many cases.

Mr. Treacy

Are more people to be given a £12 a week increase like the judges?

Mr. Lenihan

The emergence of this pattern clearly called for a Government attitude. The Government in any democratic country are charged with a certain responsibility. They are the ultimate regulator in regard to our economy. The Government must take a stand and have a clear duty to do so on certain occasions. This occasion was the revelation of this gap emerging between productivity and earnings. The Government decided to set out in this dispassionate fashion the facts of life in regard to our economy and as regards this emerging pattern. That is all the White Paper seeks to do. There is no recommendation in regard to compulsion, no recommendation in regard to compulsory Government action. There is no Government proposal to enforce any compulsory regulation. The White Paper merely sets out this fact and appeals to all people — wage-earners, salary-earners and dividend-holders — to exercise restraint in respect of incomes for the time being, having regard to this emerging pattern. That is all it does. It is the clear duty of any Government to take that sort of action appropriately and in time.

I do not like to engage in hoary political disputations, but 1957 is not so long away. There you had a classical example of a Government that waited too long and took action too late. We do not want to be put into the position of coming along in nine months or 12 months and having to take the sort of drastic action an incompetent Government had to take in the autumn of 1956. It was quite evident to that Government that an undesirable pattern was emerging in regard to the economy. It had emerged some 12 months before they took any positive action. Right through 1955, it was quite evident that the balance of payments position—the ultimate indicator as to how the economy is going—was getting into a state of disorder. Eventually, in late 1955 and early 1956, the magnitude of the disorder was quite apparent to the extent that there was a deficit of £35.5 million.

No action was taken. The Government dithered and frittered away the months. They made no appeals or exhortations to the people such as those contained in the White Paper. Instead, they continued on in a euphoria of their own creation. Eventually, they did take action but they took it at a stage when only drastic action could be taken and only disastrous results could come from it. That is exactly what happened. Instead of appealing to people at an early stage to retrain incomes, instead of making a sane exhortation to them, they followed a policy of drift which eventually resulted in drastic action being forced upon them. Under the compulsion of that drastic action, they introduced the levies and the restrictionist policy of clamping down on credit which caused massive unemployment in late 1956 and early 1957.

We do not want a repetition of that. We cannot afford in this country to have a repetition of it. We cannot afford a slowing down of the engine of the national economy any more. We have it going and we want to keep it going. The way to do that is to make people aware of the position in good time and to exhort them to restraint in income increases in their various fields. That is the purpose of the White Paper. We do not intend to follow any policy of drift. We have taken this action even before the final balance of payments figure is available to us. It is quite obvious however there will be a deficit, probably in the region of £12 million, in respect of last year. That is apparent in mid-February of the following year. It was quite apparent to the Government of the day in January or February of 1956 that an enormous balance of payments deficit was emerging from the previous year but no action was taken and no exhortations made. That is one of the facts of life in regard to how a Government operates or does not operate.

You have in this White Paper an example of a Government making exhortations, of a Government placing the facts of economic life before the people, so that a policy of restraint can be established by them in their various fields. We did not get that example of leadership in 1956. They gambled on there being no repetition of the £35.5 million deficit. When they saw that gamble was not coming off and that another deficit was emerging for 1956, they took the panic action which caused the massive unemployment in early 1957.

The Labour Party and ourselves have this much in common. We have always been concerned with providing full employment and seeking to adopt the plans and proposals necessary to secure it. The Labour Party do not want a repetition of——

Mr. T.F. O'Higgins

Wages standstill orders.

Mr. Lenihan

——having 95,000 people on the breadline as there were in January, 1957.

Mr. T.F. O'Higgins

Or 300,000 people emigrating.

Mr. Lenihan

Then the immediate past-president of the Irish Congress of Trade Unions is either a fool or a fraud.

(Interruptions.)

Mr. Lenihan

Mr. Donnellan

An Ceann Comhairle

There is no excuse for interruptions.

Mr. Lenihan

Deputy O'Higgins knows that over the years since we came into office, economic expansion has risen; in fact, a one per cent annual increase in national income which was one of the lowest in Western Europe during the last Coalition period has now increased to a five per cent annual rise in national income, which is one of the highest increase rates in Western Europe. I do not have to elaborate on the various matters discussed this morning by the Minister for Finance. I shall mention one which is very dear to Deputy Dillon's heart —this question of exports. You had a situation in the last two years of the Coalition Government where exports were falling. In 1955, you had exports in the region of £110 million. In 1956, they fell to £108 million. Exports now stand at £186 million. Exports, which were falling during the last period of the Coalition Government, have risen to £186 million—a record increase in money terms, in volume terms and in percentage terms. In 1957, as a result of the disastrous economic policies followed at the time, policies resulting in unemployed on the breadlines in January, 1957, the people scuttled out of this country. They scuttled out when they saw the breadlines in the early part of the year.

But what has happened. Throughout the debate, the factor of wages seemed to dominate. I would refer Deputies to Paragraph 13 of the White Paper which deals with the very important problem of making management efficient, of having better labour-management relations, better communications between the shop floor and management. Indeed, it emphasises that:

Acceleration of the rate of increase in productivity requires the urgent attention of management and staffs. In a country facing evergrowing competition and seeking new export outlets, there is an urgent need for increased consultation and collaboration between employers and workers with a view to securing a steady growth of productivity.

The Government are making available inducements and assistance to enable management and employers to re-equip their factory premises, to reorganise their factory operations and to re-adapt their methods of working. That again is a matter that needs to be emphasised and, indeed, has been emphasised since the publication of the White Paper. The White Paper deals with more than wages; it deals with the importance of improving management efficiency.

A further aspect of misinterpretation has been this allegation that any incomes policy proposed by the Government would be pursued in some way without consultation with the interests concerned and in some arbitrary fashion. That is a misconception. I have only to turn to Paragraph 19 in which it is emphasised that:

This White Paper is being issued because the solution of the problem of securing a closer correspondence between increases in incomes and output is now a matter of urgent national importance. The Government propose to invite the National Employer/Labour Conference as representing organisations of employers and labour, to discuss a method by which an objective assessment of the economic position and potentialities may be made from time to time with the object of assisting those who have responsibilities in settling wage and salary rates in private employment in establishing a more orderly relationship between income increases and the growth of national production.

The whole emphasis is on consultation with the National Employer/Labour Conference, the bringing together of management and labour to work out the criteria on which income increases may be made.

The purpose of the White Paper is to draw attention to the necessity for a national incomes policy. The important thing is to emphasise the problems and this is the essence of leadership. We must not allow things to drift. We must inject into the public consciousness the notion that here is a problem that must be met. That is the essence of leadership. We have produced this White Paper in order to bring the mind of the public to bear on the problem of this dangerous trend—this gap between incomes and productivity. We feel the public and the interests concerned will see, and have seen, that this trend could be serious and might be dangerous and that now is the time to take stock of ourselves. I am quite certain, despite the attitude in this House, that the National Employer/ Labour Conference discussions will be resumed. Sensible people will see that it is necessary to have resumption of the talks and to keep this Conference moving on the rails in discussing this very important matter.

If there is one thing on which there is general agreement—Deputy Dillon stated it over the week-end and it was stated by the President of the Irish Congress of Trade Unions on various occasions—it is the importance of evolving a national incomes policy after full consultation and after reaching agreement on the statistical criteria on which incomes can be increased in relation to productivity. That would be done by way of co-operation on the part of all the interests so as to hammer out a national incomes policy.

Incomes and productivity should move step by step together. That is the wish of everybody here. What the Government are doing is drawing attention to it in this White Paper and stating, as I have just quoted, that they proposed to invite the National Employer/Labour Conference to bring its mind to bear specifically on this problem and to evolve, after full consultation, a form of incomes policy. If this White Paper and if this debate —even though it may have gone off the rails at times—does that, or brings about a situation where that can be achieved, it will all have been worthwhile.

The essential argument that the Government have put forward has not been gainsaid in this debate. I repeat what the past-President of the Irish Congress of Trade Unions said, that the White Paper is a warning signal and not a stop sign. People outside this House, who count on both sides in industry, will see it in that light, as a warning signal and not as a stop sign. If seen in that light I am quite certain that the people who count in trade unions and in management will sit around a table and co-operate with the National Employer/Labour Conference and see to it that we do evolve a national incomes policy which will prevent the need for a Government to issue any warning signals or stop signs, an incomes policy that will move forward automatically in accordance with rising productivity — an "incomes" policy — including profits, dividends and wages which will move upwards and remove the need for any Government issuing White Papers in regard to such signals or warning signs. I feel that this will emerge as a result of the public interest arising out of this White Paper. This is a very fundamental problem in our economy. If we can tackle this problem, then we can go ahead in regard to building our economy here and improving our export position.

Dr. Browne

Speaking as a politician and having listened to a fellow politician in a position which can only be described as a back-to-the-wall situation, I cannot help feeling admiration for the skill, exercise and political tactics of the Parliamentary Secretary. It is a good thing when a politician faced with a desperate situation can put a face on it. But I think we should try to draw the line at a misrepresentation of what I honestly believe to be the position as set out in the White Paper. He tries to give a fundamental misrepresentation of what is in the White Paper. I want to move the amendment.

An Ceann Comhairle

The Deputy may not move the amendment until later.

Dr. Browne

The fundamental misrepresentation to which I referred is this one concerned in paragraph 21. I do not believe there can be any doubt about the implications of that paragraph. The Parliamentary Secretary seems to try to create the impression that this was merely a sort of a-b-c chosen in simple economics for the benefit of the public. I do not think anybody could take that statement of the position and leave it at that. It is very much more than that and I do not really think the Parliamentary Secretary does not agree with me.

In paragraph 21, they conclude:

In the light of the considerations referred to in the White Paper, the Government deem it necessary that Departments and State-sponsored organisations should not accede for the present to any claims for increases in wages and salaries or for changes in conditions of work, having the same effect, which would arouse similar expectations in other employments.

In the Parliamentary Secretary's hearing last night—I think he was here— the Taoiseach asserted that now we will not start a ninth round wage increase within the Government services and we will not permit statutory bodies to increase wages and salaries. I do not see how the Parliamentary Secretary can assert with any honesty that that does not amount to a wages standstill order, a salary standstill order. The fact is, whatever gloss they are trying to put on it now, that if this paper, had simply contained the warning or the red light type of warning to the public generally and the trade union movement in particular, the trade union movement would not, I think, have missed the point. I do not think that the Parliamentary Secretary should base his case, particularly in the light of the future and the very grave conditions his Government are facing in the future, should they survive this motion, on abuse of the trade union movement by his suggestion that they are predominantly a bunch of hysterics, which is implicitly to suggest that any statements made, following the decision, made in this White Paper, were hysterical in tone.

It was obviously a decision of a majority in the TUC and if it was a decision of the majority, it was a considered decision by a body which has been praised by people from both sides here in very fulsome terms as a consistent body, consisting of people over-responsible or over-conscious of their responsibility to the community. Consequently, I think it does a very grave disservice to the Taoiseach's efforts to try to improve the position created by the Paper by this implicit wages standstill and salary standstill order.

It is no good taking individual members; every individual member and every group has a right to his personal opinions. We must take the group opinion, and the group opinion was a very downright condemnation of this White Paper and that group decision was in accordance with—this is the strange part of this whole White Paper —a decision taken in July last at their annual conference in which they said they would resist any attempts to fix wages or salaries with all the powers at their disposal.

As I say, the strange thing is that the Government should have taken this step without consultation. I do not see why they should shy away from prior consultation. There is no reason in the world to accept an advice given at a consultation but I think there is a fairly generally accepted practice in Government Departments of consulting everybody on matters of importance to the individuals concerned, listening to their advice and then taking it or leaving it, just as it suits. Is the Parlia mentary Secretary conscious that the Government's responsibility is to lead? To that effect, they have taken a decision one way or the other. That is an admirable thing, but at the same time the decision should have been one which had taken into consideration all the factors which afterwards might colour the decision or which might be of importance in swaying the decision one way or the other.

So much might have prevented the very drastic reaction which has ensued from a not notably radical trade union movement. Our own trade union movement here, is, if anything, a conservative organisation.

The fact that the reaction has been so brisk and so spontaneous does seem to me to lead to the conclusion that the handling of the matter by the Government has been particularly ill-advised. I think that condemning and accusing these people of being extravagant on top is not going to help this situation at all.

The Parliamentary Secretary attempted to create the impression that this was a broad ultimatum. He did not use the word "ultimatum" but a much softer word. The public generally in connection with all incomes, profits, dividends, salaries and so on know quite well that we have this decision that State servants and servants of State-sponsored bodies must recognise that they will not get any increase in their wages and salaries for an unspecified time. There is great difficulty with regard to the person who is faced with the need for an increase in salary and who is faced with this restriction on his demand. As far as he is concerned, he does not get money when he needs it and consequently it is a wage and salary standstill to him.

The Parliamentary Secretary has attempted to create the impression that this covers everything. Of course, it does not. Of course, the Government have said there should be profit restraint, dividend restraint, but they have also said that they can do nothing about it. They cannot take any effective steps. That is in complete contrast to their relations with semi-State bodies where they can take effective steps. They have told these groups involved that they may not have an increase, no matter how valid their demand may be. On the other hand, they have said to the profit and dividend people: "We hope you will not increase your dividends and profits but we can take no steps to stop you if you wish to do so".

Wage and salary increases are being restricted but it is presumed that the Government within nine, 11 or 12 months will be through their present crisis and they will then be able to loosen their purse strings and with economic expansion, possibly after an election, there will be a time when profits and dividends can be declared and can run to any level and the people will have forgotten that this profit restriction was simply not operative because it will be taken in the context of a general easing of economic tension. So the position is clearly that it is aimed at a specific group within the society.

The Taoiseach had a certain amount of pseudo-indignation at the suggestion that this was directed at a class. Now "class" has several meanings. There is a section which is affected and a section which is not going to be affected and I do not think there is any gainsaying that. I think that point has been established and the Government will yield to nobody in their regard for the wage and salary workers in general, and all workers in particular. That may be so, but the position here is that there is this specific direction to the mass of the people that no matter what their case is, they will not get an increase in their salaries or their wages. This brings me to another point. Nobody going to arbitration, nobody going to a trade union and nobody going to the Labour Court says: "We want an increase for practical purposes; we want an increase simply because profit is increasing." The general thing is to go and say it is because of hardship or an increase in the cost of living or an increasing deterioration.

We all know the various Encyclicals there are about the necessity for a good employer to pay a just wage and yet the Government have taken a decision here that they will not pay a just wage. They have given their reasons. They say they are not going to pay wage increases to their salaried workers for an unspecified period. I think that is a very serious decision which the Government say they are taking in the national interest. It is also the decision of a Government which can at the same time claim, as the Parliamentary Secretary has attempted to claim, to be prosperous so far as economic expansion is concerned. I consider that is one of the weaknesses of the points the Parliamentary Secretary has tried to bring out. On the other hand, he says emigration has fallen, employment has risen, the real value of income has gone up, total exports have soared to an unprecedented figure. With all of those things, it would seem to me that he is trying to make a case that the Programme for Economic Expansion has been a success. In fact he says it was a success.

The Taoiseach put it in a different way. He said: "The Opposition are complaining not because of our failure but because of our success. They are annoyed because of our success." It is incredible that this runs through the speeches made by members of the Government. The Minister for Finance —usually a well-balanced man—followed much the same line in his speech when he said that things were never better, or certainly were not as bad as in 1956 and 1957. That is the old comparison which has gone on from 1932 as can be seen by reading through the Dáil Debates. The main thing is that there is this attempt to say this Programme for Economic Expansion has been a success and at the same time, they tell the victim— presumably that is all you can call the consumer, the salary worker— that though this has been a great success—it was announced in 1958 and 1959—“we cannot pay you a just wage.” Surely that is much more like the proclamation or declaration of a bankrupt concern which is going downhill, of a concern which cannot make both ends meet, which cannot meet its just commitments? Surely that progress in economic expansion should mean that the Government were going to pay a just wage. According to this White Paper, they are not going to pay a just wage.

The Government cannot pay it, despite the fact that they are trying to claim that the Progress of Economic Expansion announced with such great excitement and enthusiasm by the Government has been a success. It reminds me of the old enthusiastic surgeon who carried out an operation and said the operation was a great success, but the patient died. As far as the public are concerned, that is what has happened, because surely success must be judged in figures of re-employment, and above everything, the standard of living. I can see difficulties for the Government but surely the position now is that we have come to the end of this debate that has gone on at least since 1932 in which successive Ministers have made speeches, very like that of the Taoiseach last night, and the net result to the public has not changed appreciably.

One of the minor political enigmas of politics in Ireland was from 1932 to 1959, whether the Taoiseach was a person of tremendous ability, skill and enterprise who was to some extent frustrated by the inhibitions of the older politicians around him. Most of us wondered what would be the position when this man was on his own, when he was really given a chance. Would he be an outstanding success. We now know it was only a fiction that the people who many of us thought were in his way obstructing the evolution of a dynamic mind and in the way of a strong enterprising forward-looking person who could create a socially just and prosperous society. This just did not exist. Since taking over complete control of the country, he has simply shown he has not got the qualities which many people including myself believed he had, the qualities which would allow him to do away with the old inhibitions that many of our Governments and Ministers for Industry and Commerce in particular have had over the years and, as the present President once said, if we do not succeed within the system, we will change it and decide on a completely different one. Many people believed that Deputy Lemass as Taoiseach would have done that. However, it is quite clear now that he has many serious defects.

One of his most serious defects is this inability to accept the fact that he can make mistakes, that he is not infallible. I have only had a relatively short experience of ten years or so of listening to the Taoiseach speaking but I have read many of the debates going back since the beginning of the Dáil, certainly since 1932, and one of the things that has been most consistent in the Taoiseach has been his absolute self-assurance. In spite of all the facts to the contrary in a situation he is quite happy that what he said was right and what he is now saying will prove to be right. We know the fiasco of the Common Market has disclosed him to have been wrong on many occasions. His assessment of a position, his analysis and conclusions about a situation, again and again, have proved to be completely wrong and obviously derived from his own wishful thinking or imagination. This is now on record and I do not intend to go back over it but he has been proved to be completely wrong on many occasions.

The most dangerous aspect of this Government's existence is the fact that this man who is so completely unsettled and unreliable in his powers of analysis of a situation and in drawing conclusions from that analysis, is in control of the country at a particularly difficult time. All the speakers who have said the situation is serious are completely right. I do not think we have been in such a serious position since the 30's. It is even more serious than 1956 and 1957, the reason being, of course, the imminence of a continual deterioration of the situation which appertains in Britain at the moment. This is the factor which will colour events here, no matter what any Government do, growing unemployment no matter what Government are in power. Even if a Labour Government are returned in Britain, I believe the situation must get worse before it gets better.

Because of that, this Government or any Government in power have particularly difficult problems to deal with and in that situation, what is needed more than anything else is a man who is prepared to sit down, look at the position as it is, not imagine the situation as he would like it to be, not a person who is on record as having promised he would do certain things and failed to do them but a person who will say: "This is an emergency situation where there is likely to be growing unemployment here as a result of the pressure against emigration in Britain." This is a situation which requires emergency measures and quite clearly, there are no emergency solutions in this White Paper.

As Deputy John A. Costello said, there are 20 paragraphs devoted to economic baby talk and then there are two paragraphs relating to labour-employer discussions and a reference to the standstill on wages and salaries. That does not provide us with the solution for the grave problems which are facing the Government at the moment. The truth is that the Government are not frightened enough of the situation. They are not sufficiently frightened of the implications of the reduction of tariffs which ultimately is inevitable, the increasing competition from very powerful outside industrial forces, the inevitability of many of our industries going to the wall. It is unimportant now that they are weak and undermechanised. The reality is that they will not be able to stand up to the competition that is coming and that means growing unemployment.

These are matters which the Taoiseach is refusing to face. His refusal to face them today is a consistent part of his character. When the adjournment debate was on last December— Deputy O'Higgins referred to it this morning—the Taoiseach made a number of statements. At column 1470 of the Official Report of the 13th December, 1962, the Taoiseach said:

There is no comparison between the situation that exists today and that which existed in 1956 when Deputy Dillon was controlling the affairs of the nation. The situation today does not require the emergency measures which had then to be resorted to, with serious consequences in that year, in order to prevent the total collapse of the economy.

Again, in the same column:

A multitude of devices have been brought into operation in order to stimulate exports and they are working well and satisfactorily.

That is clearly not a warning. It is not a red light or an amber light; it is the green light all the time. According to him, everything is all right. Again he says: "On the contrary, the indications are that the outlook for the future is quite good, that the falling off in exports is not necessarily a cause for anxiety." Then there is his statement referred to by Deputy Dillon that the various danger signals then appearing were not a matter of great concern. He advises Deputy Dillon to exert himself a little more in reading the documentation made available to him, including the Central Bank report. I wonder if the Taoiseach read the Central Bank report. If he did, he did not see the warnings that things were in a serious condition.

Page 15 of that report states:

State expenditure, borrowing and annual debt-service charges are thus increasing much more rapidly than national output.

And again:

Much of the public capital programme is still of a social nature, and some of the remainder is economically productive in a long term sense only.

Further on, it is stated:

On an international comparison of cost per unit of output we have not improved our competitive position since 1950.

On Page 11 the report states:

It is now widely recognised that the recent increase in incomes considerably exceeds the increase in output. This involves increased costs of production, with a loss in competitive power both in the home market and in markets abroad, higher consumers' prices and, probably, increased imports of finished goods and domestic consumption of home produced goods — many of which contain a proportion of imported materials—with a further widening of the external trade gap and a deterioration in the current balance of payments.

I will not weary the House by repeating many of these quotations but I will say that there were quotations in the Central Bank report which did not rationalise the reasons given by the Taoiseach for recommending the reading of it by Deputy Dillon. On Page 16, it says:

The present is a very critical time for Irish industrial development. Salary and wage earners have fared well over recent years, and the time has come for a pause, at least until national output has expanded sufficiently to enable further increases in incomes to be negotiated without risk to continued economic progress.

Nobody has more contempt for the ideology of the Central Bank than I have, but here in this House, it is never questioned. Leaving that aside, here is an authority in which there is a volume of simply worded warnings of the necessity for the restraint now advocated by the Minister for Finance and a suggestion that this pay pause which is now included in the White Paper should be introduced. At the time of the Central Bank report, when the Taoiseach was asking Deputy Dillon to read it, it is quite obvious that he had not bothered to study it himself. At that time, he was talking about the economic situation not being of any great concern.

Surely that is an example of the Taoiseach's complete refusal to accept the fact that the Programme for Economic Expansion has been a failure? It has not been the success which the Parliamentary Secretary to-day suggested it has been. When the Taoiseach brazened it out here in the face of the Opposition criticism and said that there was no need to worry, he did so in the full knowledge that the authority on which he places so much reliance had warned the country some months before the December debate. What has happened between December and mid-February to create the necessity for the restrictive measures now being introduced by the Department of Finance?

The Taoiseach has attempted to justify this discrimination against the salaried worker and wage-earner in their own interests. He says that if they use this restraint, their output will increase and that he will be in a position to reward them for their increased efforts. I do not know of any justification for this thesis at all. It strikes me as being very like this frightening preoccupation with slogans which has characterised so many doctrinaire conservative Governments. In the early days, the key to prosperity was free trade. In the 30's, it was protection and in the 60's, we get back to free trade. We have mention of EFTA, and GATT and the EEC. We are told that they are all going to be the key to our success and that all we have to do is to increase production. There is nothing wrong in saying that we must increase production but it is the way that they set about increasing production that is wrong and that is the basic fallacy of the whole case put forward by the Government.

There is a suggestion that there be consultation between the workers and the employers to get wage restraint. That is not going to solve the problem of the Governments, either in Great Britain or here. The Taoiseach said last night: "Do not make the same mistake twice". Why does he, having accepted that simple truth, go on to make the same mistake as Selwyn Lloyd made in Britain which got him the sack and brought his country to the verge of a very serious economic recession? Surely one can learn from other people's failures and mistakes. This wages pause did not work in Britain and it will quite certainly not work here.

Then we come to the suggestion that the wages pause is the important consideration. There are many economists who are prepared to say that the wage content is not an important part of the approach to increasing productivity, and I think that is simple enough for anybody to see. The wage-freeze is directed against this one section, the wage and salary earners, as opposed to the profit and the dividend owner. In that way, it is clear it is sectional in its direction. This is, of course, on all fours with consistent Government policy over recent years and I think the facts will show that there is a tendency to protect the wealthy minority in this country as against the welfare of the masses. I do not care what you examine, what State institutions you study, you will find proof of the fact that there are two nations here.

I think that is a good phrase to describe the position. There are two nations here, the privileged minority and the underprivileged, the masses. This is actively shown in virtually every Department of State. You have it in education, where our secondary schools and universities are virtually closed to the majority of our youngsters, no matter what talent they possess, simply because they have not got the money. In the Department of Health, you have the position that there is discrimination against the masses under our health services. The wealthy have first-class services because they can pay. I am amazed when I hear people here talking about our Christian society.

Mr. Leneghan

The Deputy may be talking about Dublin society. It would not happen in the West of Ireland.

Dr. Browne

I am talking about my own general experience. The same discrimination applies to old people. A society which treats its old people with a miserable 37/6 a week obviously is a society that discriminates against the masses of old people. As I say, there is that underprivileged majority. The Minister for Justice adequately illustrated the distinction when he gave tremendous increases to the judiciary for reasons which nobody knows. Surely that was an example of privilege. We have the situation where the majority of the people out of work are poor people, people with very little or no education simply because they could not afford it. The majority of our emigrants are people who are unskilled workers of one kind or another.

That is the kind of society it has taken us 40 years to build. I do not think it is anything to be proud of. In fact we should be thoroughly ashamed of it. I was amazed to hear Deputy Declan Costello recently saying that we had such a lot to contribute to Europe. I do not think we have anything to contribute to Europe. Look at our taxation system. Taxation of incomes, affecting the workers generally, has gone up from £4 million in 1933-34 to £34 million. Taxation on expenditure here has gone up from £61 million to £89 million; taxation by way of social insurance has gone up from £5 million to £10 million, just double; while taxation on capital went up from £2,803,000 to £2,870,000, a negligible increase. On the masses of the people, the burden of taxation has been increasing all the time. We have one of the highest rates of indirect taxation in Europe.

Therefore, I believe that the complaint about the question of output is not against the worker at all. The worker to-day has nothing to do with it. I do not think he has any control over it at all, because of the alteration in the whole pattern in industry these days. The old days of the craftsman—the wheelwright, the blacksmith, the wood, stone or iron worker—are all gone. We are now in an age of mechanisation and the worker can work only as fast as the machine lets him. The result is that the essence, the key to increased productivity, lies with the machines, not with the men, and the machines are provided by the management. Therefore, unless management provide machines for the men, they can work until they are black in the face, until they collapse from apoplexy, but they will not increase production one iota.

There is a machine for making cigarettes which, say, turns out 1,000 per minute. It will not produce 1,001 no matter how hard it is worked. A bottle machine which turns out 100 a minute will not turn out one more, no matter how hard you work it. The same applies to all the forms of machinery which now are part of our industrial structure. In agriculture, it is quite clear that the man who formerly had the pick and the shovel, or the pick and spade, now has the colossal bulldozer which will give him so much production. Give him another, and no matter how hard he competes with the optimum, he cannot improve on it.

It is this failure on the part of the Government to realise these facts that is responsible for the essential weakness in their whole case. It is the most frightening manifestation of their misunderstanding of the problems before them and of the methods by which these problems can be solved. It is stupid to think that the Garda, the transport workers, the road workers, the old age pensioners, can increase production, no matter what they do. They are completely dependent on the industrial worker. They become the victims of the failure of the industrial worker to increase production, and the industrial worker is the victim of the manager who refuses to put his profits back into industry in order to bring us to a position where we could compete successfully on world markets.

Our basic failure here has been our complete dependence on private enterprise capitalism. When I have asked the Minister for Industry and Commerce what he proposes to do about redundancy, apparently nobody is doing anything as far as he can say. We have seen thousands of rural workers leaving year in, year out, but nobody has made any attempt to rehabilitate them in any kind of remunerative work. Most of them have had to emigrate. Certainly not many of them have been absorbed into our industrial effort. A very high percentage of our industrial workers in fact have themselves had to get out.

When we ask the Minister what he proposes to do about impending redundancy, he says he cannot interfere, that it is a matter for management, a matter for these industries themselves. He says that this is not a dictatorial society or there is some other attempted sneer of that kind. Meanwhile, this laissez-faire type of doctrinaire conservative approach to economic problems and employment problems is being particularly hurtful to many people. You have this pleasant minority who have all these privileges of best education, best care in time of age and so on. You have created that minority. You have created this system in which that minority derives a very good living indeed, but you have done it at a tremendous cost in human suffering and hardship for the great mass of the people.

Very good; both sides of the House share responsibility for that over the past 40 years. It must be clear, therefore, to both sides that where you have been unable to find jobs for 1,000,000 people, where you cannot educate or look after your people properly in health, sickness and old age, you must accept that this type of economy in which you believe has been a failure. It is you who believe in it, it is you who believe it can work; and it is you who have failed to make it work in respect of a very significant minority of our people. Surely it is about time you accepted that and took the decision that we will, in fact, care for the mass of the people, even if it does damage the interests of a minority within the country?

As the Parliamentary Secretary to the Minister for Lands said, the workers are being exhorted and encouraged to increase production. It is like asking a man to lift himself up by his own bootstraps. He cannot do it. If you give him a spade and there is a bulldozer available, how can he compete? That is a fair comparison between Irish industry and continental industry. I am amazed at the tolerance over the years of the trade union movement of this position, where they have condoned the continuation of private enterprise capitalism, which has, first of all, denied so many of our people the right to work here at home, the right to a proper standard of living here at home and the right to security of employment at reasonable wages.

This is a point I should like to deal with. It seems to me we have attempted to create the position of making industry competitive with industry on the continent at the workers' expense. We have tried to be a little Japan here in the Atlantic. I do not know whether they exploit their workers in Japan. One does not know how much is propaganda or truth, but it is said that they exploit these people and give them bad wages. If our experience of Japanese employment in Shannon is anything to go by, it is probably true. It seems to me we are trying to do much the same thing here.

The last issue of Trade Union Information contains a comparison of labour costs in manufacturing industry in 1961. Seven countries were covered: Sweden, West Germany, Denmark, Switzerland, Norway, Britain and Ireland. In respect of a male worker, the best is Sweden. The figure is 8/10 per hour; the worst is Ireland, at 4/6 an hour. In respect of fringe benefits and indirect wages, the best is Sweden again at 1/7 per hour and the worst Ireland at 7d. per hour. The total is 10/5 per hour in respect of Sweden and 5/- in respect of Ireland. That is the difference between Irish labour costs and Swedish costs.

When we come to female labour, the position is even worse. Sweden is again the best at 6/1 per hour and Ireland the worst at 2/7 per hour. In respect of fringe benefits, Sweden is 1/1 per hour and Ireland 4d. per hour. Clearly, what we are doing, or what we have been trying to do, is to create an impression of efficiency in industry by grossly underpaying our workers. If they worked in any of these other countries, they would be getting very much more than they get here. Britain is the next to us. She is slightly better.

We have the position here where workers who are working at the lowest rate in Europe are told: "You must continue to work at the lowest rates in Europe." It cannot be said on those figures that one of the problems in keeping down prices is the cost of labour. Those figures completely refute it. From the figures for direct and indirect wages, can we say we pay our workers a just wage, in spite of all our cant about our belief in Papal Encyclicals and all the rest? We do not pay a just wage, but we are not going to continue to pay even that unjust wage.

Somebody said to Deputy Costello last night that there was no question of reducing the standard of living. Of course there is. Since there will be no control over profits and rising prices— and prices will continue to rise—if wages are fixed, the standard of living will be reduced in that way. Even though we are grossly underpaying our workers, we will not even continue that rate of payment. This is all in order to bolster up the grossly inefficient mechanism of private enterprise capitalism which has so outrageously failed the country over the past 30 or 40 years.

Another factor of labour employment in Ireland is the insurance or welfare benefits of one kind or another paid here and paid on the continent. Again, the Christian way of life. On the continent the expenditure by employer and employee on social security contributions varies from 20 to 30 per cent.; in Ireland, the figure is six per cent.

Nobody can say that productivity here is not related to the private enterprise dominated industries in the country. We are not talking about the semi-State concerns, which are mostly public utilities and which have nothing to do with productivity. The field of productivity—the profit-creating industry—was allocated nearly exclusively to this type of private enterprise concern. Whatever productivity we have here is the productivity created by private enterprise capitalism.

Of a total of 18 countries in an estimate of the gross national product per head of the population at the end of 1961, according to PIX world currency reports, Ireland came seventeenth. America was first with £1,040 per head of the population. Ireland had £248 and Italy £246. It is quite clear that we have not at all used labour and capital in order to maximise the potential of productivity in the country. In productivity, Ireland ranks at half that of the United Kingdom, Belgium, France, West Germany and Denmark and less than two-thirds that of the Netherlands and Norway.

In addition to these facts, a very interesting survey was carried by Dr. Nevin on comparative prices here and in Britain, the nearest country with which comparisons could be made, with all the weaknesses of such investigations. But Dr. Nevin showed that if distribution margins in Ireland were, in fact, lower than in the United Kingdom, this would imply that producers prices may be on average some ten per cent. above the United Kingdom equivalents. He then mentions that further adjustments could be made for quality and I do not know anything more than he appears to do about that. This is one other overhead which we carry in order to maintain this incubus of private enterprise capitalism in Ireland. We have the lowest wage rates in Europe: our gross national product is one of the lowest in the world and, in addition, prices to the unfortunate consumer are something—it states eight to ten per cent., but I understand it is in the region of 12 per cent.— higher than comparable prices in Britain. Clearly, if the Government were really concerned for the mass of the people, the workers generally, there is one simple way in which they could reduce the cost of living considerably.

The Taoiseach was very concerned the other day because we were described as an under-developed country. Now it is changed to the euphemism that we are a country in the course of economic development. As the Minister for Industry and Commerce rightly said, that means nothing at all but I think the original description of under-developed country is clearly a perfectly valid one as regards Ireland. All this highlights the idiocy of the suggestion that we might go into the European Community as full members. If we were members now of EEC, this is one device which we would not be allowed to operate. We would not be allowed to restrict wages or social services in this way or to maintain them at the present level. All of these would have to be evened up.

In regard to the question of an undeveloped country, the Minister for Industry and Commerce said it was not true because we have this very sound infra-structure of education, roads, transport, shipping and so on. That is quite true. These are State or semi-State concerns. People profess to believe in private enterprise capitalism but when they are in trouble, they produce the State concerns — and rightly—in order to bolster up any case they may have to show that we are in fact moderately prosperous. On the one hand, we have tariff protection and restrictive trade practices, on the other, and the producer has a society in which he can take any profits he wants to take. There is no profit restriction. Because they believe in this, they would not extend the idea of public ownership to the major producing industries, profit creating industries, with the result that it is left in the hands of grossly incompetent and grossly inefficient people who continue under each Government to betray the fundamental interests of the country.

We have the position in which the Minister for Industry and Commerce is able to say: "Look at the success of our State companies. Look at the magnificent job Aer Lingus does, or Irish Shipping or Irish Steel Holdings or Bord na Móna or the ESB or even CIE," even though I have criticised CIE myself very often. Basically, he is able to point to these and say they are moderately well-run and that some are extremely efficient. While he does that, he will not extend the principle and say: "Because they have been so successful and because the others have failed so badly, we must in the public interest"—if they are interested in the public —"extend this principle of public ownership to the greater part of industry."

Even where it is extended in the case of the Irish Sugar Company in going into food processing—this is the first intelligent development that has ever happened, in my belief, in this sector of industrial development — the industry has been denied the right to compete with private enterprise because of the fraudulent claim that they believe in free competition.

Mr. Corry

We shall get over that.

Dr. Browne

The sugar company has to go into the highly competitive export market and sink or swim there. How can the Taoiseach pretend he is concerned about the mass of the people when every conceivable aspect of social and economic policy over the years of his control of this economy has been directed towards the aggrandisement of an already wealthy minority at the expense of the great mass of the people? Here we have a justifiable claim about State and semi-State companies, and what happens? These are the very companies which, as Deputy J. A. Costello said yesterday, are the first to suffer for their own success and for other people's failure. Why should they be forced to restrict wages or salaries or incomes because the other gangsters—I believe that is not an over-statement because they are exploiting the community which protects them and allows them the tariff barriers and so on—are inefficient and have to charge an extra 10 or 12 per cent. to the consumers? If the British could come in here and flood the market with consumer products, we could buy them for 10 or 12 per cent. less, if it were not for these industries which we protect. Instead of appreciating this protection by the consumers, they proceed to exploit the consumers by charging any price they want to charge—think of a number and double it.

An Leas-Cheann Comhairle

I am sorry to interrupt the Deputy but a number of other Deputies are pressing to take part in this debate. The Deputy will appreciate that time is running out and that the mover of the motion has to be called on at 3.45 p.m. Questions must also be taken.

Dr. Browne

I shall conclude now.

Dr. Browne

No case at all has been made for the Government's decision——

Mr. Dillon

If the Deputy will excuse me on a point of order? I make no comment on the suggestion you have made, Sir, to Deputy Dr. Browne, but in the position in which I am, I want to submit on a point of order that there is no provision under the Standing Orders of this House—and it should be our proudest boast—restricting the right of any Deputy to address the House at his own discretion. Provided your intervention is understood in that sense, that there cannot be and is not in any majority, however great, the right to restrict a Deputy's right to address the House, I have no comment but I think that should be placed on the record.

An Leas-Cheann Comhairle

The Chair made it clear that it has not power to curtail any Deputy's speech.

Mr. J. Brennan

The Deputy's statement is not a logical one.

Mr. Dillon

It is the truth and——

(Interruptions.)

Mr. J. Brennan

One of the ways of restricting the rights of Deputies is for one Deputy to monopolise the entire time and keep others out.

Mr. Tully

Another is for interruptions to prevent a Deputy from concluding.

Dr. Browne

We are not restricted for time. If there is undue restriction, the Government must take the consequences. I was not a party to fixing a restriction on the time for discussion. I believe that an incontrovertible case can be made for showing that the culprits are not as suggested by the Government, that is the salary or wage-earners either in State employment or semi-State employment or in industrial employment. The workers who are particularly unfortunate are those in State or semi-State organisations. We have to bow in acknowledgment of their wonderful achievements and great success in the complicated undertakings which they were responsible for carrying out, for the community, over the years, and our reward to them is to say: "Whatever may be negotiated outside, you will be the first to be victimised because of the failure of the Government's policy." They should not be victimised in this way.

As I say, it is quite useless asking the industrial worker to increase production merely by restricting his wages. If anything, there is a very good case for showing that restricted wages will restrict production. As somebody has said, this fear of insecurity is there and it will lead to a slowing down of production. This, then, is likely to have a completely contrary effect. I do not know what action the Government propose to take—that is their business entirely— but I honestly believe that the situation is even more serious than in 1956-57.

One can talk about Suez or Korea as being incidents which complicated the situation for a Government but these changes are taking place all the time and they must be regarded as part of the occupational risks of politicians or societies absorbed with the problems of the economy at the time. If you were a Korean or an Egyptian, you could say that during the wars or the troubles it became very difficult, but I do not think you can use an incident in other countries to justify a failure in your own country. It is confused reasoning. It is simply irrational and it does lead to unreliability which is most dangerous. At this particular time, a pattern of circumstances has arisen in Great Britain which altogether alters the predicament of the Government as never before.

Even if the Government were extremely competent, because of our economic dependence for 30 years on Britain, because of the serious recession there, because of the clear inability of the Government to deal with that, the problem here is going to need very skilful handling. I do not think the Government are showing any likelihood of meeting their requirements in that regard. The Minister for Finance criticised the Opposition for not making suggestions. I want to suggest to the Government that they must recognise the fact that private capital has failed to invest in Ireland to the extent that it should have. If anybody looks at our external assets—I do not know what they are at present but I remember the Taoiseach saying that in the 1930s, they were £300 million and now they may be £400 million—he will see that they are going up all the time. That money should have been invested here, but that is water under the bridge.

However, we must recognise that there is not sufficient capital invested in Irish industry. We have to fall back on the public in order to find capital. A lot of work has yet to be done —school buildings, primary and secondary and, I believe, even universities; houses have to be built by the thousand; trunk and side roads have to be built all over the country; harbours have to be constructed; forestry development has to be undertaken as well as the development in rural Ireland of the co-operative movement upon which General Costello's excellent food processing schemes can be based. There is great scope for developing these enterprises, some of them productive and some unproductive, but all of them will create jobs for people. For that reason they must be considered now rather than in time of real crisis which may be next autumn or winter when it will be too late to draw up these schemes because they are complicated. They could not be done overnight as they may take nine months or a year to complete.

The Government should announce such a plan without delay in order to still the real fears which exist among many workers that their jobs are in grave danger, as they are. All the CIO reports point to the same thing. I suppose they are sample reports of some of our most efficient industries and they point to grave defects in industry. Facing open competition, there must be redundancy. That is the report of the Government's commission and that is why workers are beginning to be disturbed. They are facing continuing growing unemployment but without ready access to Britain as in the past. I believe the trade union movement should act rapidly and firmly and I hope they will insist on some action being taken in regard to social benefits.

The Government should announce an increase in unemployment benefits in order to try to cushion the unfortunate people who are now unemployed and who are facing problems they did not face before when in a time of reasonable affluence they may have entered into hire-purchase agreements which now they cannot meet from their unemployment benefit. The Government should also take steps in regard to the redundancy plans and the retraining plans about which they have spoken for nearly one and a half years but which they have not yet produced.

There were six CIO reports all about industry but none exclusively about the workers. A retraining, regrouping and re-employment plan should be announced without delay so that the worker, again, may know there is likely to be some security for him should he co-operate in working himself out of a job, which is the present proposition of reorganisation of industry. That is what it amounts to. The trade union movement should insist on at least these three basic requirements.

I would suggest, with all the deference in the world, to the trade union movement that they do not wait until the situation, as bad as it is now, has become as serious as it is from the unemployment point of view in the North of Ireland. I would further suggest to them, with deference, that they do not take the line that they have taken in the North of Ireland of marching the unfortunate unemployed up the hill to Stormont and back down again from Stormont, because it is completely ineffective, as it has shown itself to be. It does not cost Brookeborough a thought and will not cost the Taoiseach, Deputy Lemass, a thought if they indulge in the same type of practice here.

You know that one of my virtues is brevity.

Mr. Sherwin

I am speaking with some difficulty, not that I am afraid of saying what I have to say, but I am not supposed to speak at all as I have undergone a throat operation. I should like to say that I have been here since 10.50 a.m. and would have been here earlier but for the fact that I was helping three families to avoid being evicted tomorrow by the Corporation. That is my usual work every morning. Deputy Barron, who does similar work every morning, knows where I was this morning.

I am supporting the Government because not to do so would be cowardly. It would be an easy way out for me not to vote at all but I have never chosen the coward's way out. I am voting for the Government on this occasion just as I voted for the Government 15 months ago. I did so on the conviction that they and they alone should form a Government, as any simpleton should realise simply by counting heads. The total Opposition, if you like to include myself, would be 73 against 70 and that 73 would be made up of four Parties and seven Independents. How could they be expected to vote on every issue put forward by a Coalition Government or how could they all be present here on all occasions to vote in a Division when, in fact, there is no control over Independents who can come and go if they like? I voted in the way I did because of my conviction that only Deputy Lemass could form a Government and I defy anyone to dispute that.

I am proud to be able to say that, at least, I am a party to having a Government functioning in this country for the past 15 months. Whether I stand over all the things they have done is another thing. I decided to support the Government because I considered it was not in the interests of the country to have a sudden costly election which would bring about, possibly, the same results. I did the only practical thing and I make no apology to anyone for it.

As I see it, if the unions tomorrow want to have a ninth round, they can have it and if they want to have strike action to get it, they can have strike action. I am not aware of there being anything to prevent them from demanding a ninth round, nor am I aware of there being anything to prevent strike action. All that I am aware of is that the Government are trying to control events that would appear to be getting out of hand because of international economic conditions and it is their duty to try to control events in the interests of the whole people.

I maintain that the Government simply put it to the people. It has been suggested that if before the first great war England had told Germany straight that she would fight, Germany would never have started the war. In the same way, the Government are trying to make the people aware of the critical position facing the country. They may be, if you like, trying to stop the ninth round. My own opinion is that if the unions started tomorrow looking for a ninth round, and took strike action to achieve it, there is nothing to stop them doing so; and, then, the Government would have to rescind their decision, if they have made a decision, in regard to State bodies. These bodies would have to follow suit, and the Government would have to rescind any decision therefore. The initiative still lies with the unions, if they want to start a ninth round.

The Government are simply trying to control events, as pointed out by Deputy Dr. Browne. He painted a dark picture, a dark picture facing this country due to economic conditions in Europe and especially in Britain. He pointed out the many dangers that may lie ahead. The Government are only taking some action to control events so as to meet that sort of situation. But the initiative lies with the unions, if they like to take it.

Hear, hear,